Get P Earning Ratio
Pictures. P/e ratio is a widely used ratio which helps the investors to decide whether to buy shares of a particular company. Essentially, the p/e ratio tells potential investors how much they have to pay for every $1 of earnings.
In simple words, it shows the balance between price and earnings from the stocks.
An important reason for normalizing earnings is so that you can calculate a normalized price/earnings ratio. If we use next year's estimated earnings instead, we will be calculating the projected or forward p/e. The price earnings ratio (p/e ratio) is the relationship between a company's stock price and earnings per share (eps)earnings per share formula (eps)eps is a financial ratio, which divides net earnings available to common shareholders by the average outstanding shares over a certain period. Price earnings ratio ( pe ratio ) is the relationship between a company's share price and earnings per share (eps).
